Opportunity Zones provide a new tool for investors, fund managers and communities by investing privately sourced funds into eligible economic development and community reinvestment projects.

Click here to download the California Governor’s Office of Business and Economic Development’s (GO-Biz) overview of the Opportunity Zones in California.

Learn more about Opportunity Zones by visiting dof.ca.gov.

Questions? Feel free to contact GO-Biz at:
Main: 916-322-0694 | Toll-Free: 877-345-4633 | www.business.ca.gov

Opportunity Zone Investment Checklist

Identify Your Players, Convene Your Team, and Define Roles

  1. Who is the lead coordinator? Is the effort led through the mayor’s office? In many cases it may be out of the City Manager’s Office, City Treasurer’s Office, or Economic Development Department.
  2. Who are key project stakeholders? This could be property owners, brokers, residents, public entities (city, county, district, & state staff), utilities, and tenants.
  3. Who else needs to be at the table? This could include CDFIs, CDCs, regional EDCs, commercial banks, PBIDs, chambers, neighborhood groups, community organizations, education, workforce development boards, etc.
  4. What role (if any) does each group have in making your Opportunity Zone investment-ready?

Build Your Project List

  1. If the city/county is the lead organizer of the Opportunity Zone effort, agency leads in key areas (housing, infrastructure, economic development) including the fiscal officer for the jurisdiction should compile a ten-year list of possible Opportunity Zone investment projects using set criteria that will maximize the benefit to the community and the investor.
    • Some things to consider:
      1. project readiness,
      2. infrastructure investments needed,
      3. development risk and potential returns,
      4. ability to leverage other resources/programs/designations,
      5. catalytic impact,
      6. job creation,
      7. community impact,
      8. fiscal impact,
      9. creation of affordable housing,
      10. congruence with community plan & vision,
      11. neighborhood/stakeholder input.
  2. Also, evaluate underutilized municipal parcels which may be re-purposed to benefit from an Opportunity Zone investment and creating a taxable parcel either in fee or leasehold and yielding stable long term revenues to be reinvested by the Opportunity Zone fund.
  3. Think beyond the Zone by considering how these projects fit into the adjacent development/neighborhoods and the impact.

Prep for Each Project 

  1. Rate and rank the list of projects based on your criteria in step two.
  2. Identify a project lead/project finance person for each project.
  3. Be clear on what it takes to secure the land and/or if the current property owner has the same desire to complete the project.
  4. Develop project profile sheets and ten year pro formas to inform your investment/marketing guide. (see details below)
  5. Evaluate entitlement requirements and approaches to mitigate entitlement/regulatory uncertainty for possible projects.  Facilitate land assembly and prioritize infrastructure investments. Assist with site cleanup if Brownfields are an issue.

Identify Your Players, Convene Your Team, and Define Roles

  1. Explicitly state what role (financial or otherwise) the jurisdiction can play in the projects, be cognizant of long-term budget, fiscal capacity, entitlement streamlining, infrastructure investments, capital planning when making this determination.
  2. Review “Economic Development Checklist”
  3. Be proactive in establishing financing districts and encouraging Opportunity Zone funding in those areas.
    1. Tax increment financing districts-  Encouraging Opportunity Zone funding in areas where tax increment districts will be formed has the potential to rapidly increase assessed values as properties are sold and capital gains are deferred. This faster increase in assessed values results in  tax increment districts yielding tax increment revenues earlier in the district’s life which translates into an ability to raise capital much earlier.
    2. Mello-Roos districts – used in conjunction with tax increment districts a Mello-Roos district may balance out the financial model used to finance infrastructure i.e. using special taxes from the Mello-Roos district when tax increment is low to finance and vice versa.

Research Investors & Build Relationships

  1. What do they want?
  2. Get their term sheets.
  3. Understand investor’s potential risks and upside.

Identify Your Players, Convene Your Team, and Define Roles

  1. Create and tell your story based on what you learned in step 5. This is more than a marketing piece – it must have specifics: what’s on the site, what’s not on the site, cost to build out or renovate, potential ROI and data to back that up.
  2. Create Investment Prospectus.
  3. Engage with the State and other partners to market your projects.